HMT confirms UK FCA to be sole AML supervisor for professional services

HM Treasury (HMT) has published its consultation response and policy statement on the reform of the anti-money laundering and counter-terrorism financing (AML/CTF) supervision regime, following its 2023 consultation. The consultation had proposed four potential models to reform the current supervisory framework, which comprises of three public sector supervisors, namely the UK Financial Conduct Authority (FCA), the Gambling Commission and HMRC, as well as 22 professional body supervisors (PBSs) responsible for overseeing the legal and accountancy sectors' compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. HMT now confirms its intention to implement the Single Professional Services Supervisor (SPSS) model. Under this model, the FCA will become the sole AML/CTF supervisor for in-scope legal service providers, accountancy service providers and trust and company service providers, consolidating supervisory responsibilities previously held by 23 separate bodies, with the aim of improving consistency, effectiveness and coordination across the regime.

The FCA will be granted new powers through forthcoming legislation and will operate independently of HMT in its supervisory role. While existing PBSs will retain their broader regulatory and representative functions, the Office for Professional Body Anti-Money Laundering Supervision will no longer be needed. Given the scale of the reform, implementation will take time and is contingent on the passage of enabling legislation, confirmation of funding arrangements and the development of a detailed transition and delivery plan. As such, the timeline for implementation will depend heavily on the availability of parliamentary time. A separate consultation is expected in early November, outlining the powers the FCA should hold as the new supervisor. The FCA has published its own separate statement on the same day.

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